SpaceX Challenges Sole-Source USAF Award to United Launch Alliance

Apr. 25, 2014 - 03:45AM
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A SpaceX Falcon 9 lifts off on a resupply mission to the International Space Station. SpaceX is protesting a US Air Force decision to grant a sole-source award of launch cores to the United Launch Alliance. (SpaceX)

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WASHINGTON — SpaceX has filed a protest against the US Air Force over the service’s decision to award the United Launch Alliance (ULA) a sole-source block buy of 36 launch cores.

“Essentially what we feel is that this is not right, that the national security launches should be put up for competition and they should not be awarded in a sole-source uncompeted basis,” said SpaceX CEO Elon Musk during an Friday news conference.

The suit is being filed in the US Court of Federal Claims. The Air Force was informed of the suit before the press event, according to SpaceX.

“It just seems odd that if our vehicle is good enough for NASA in supporting a $100 billion space station and it’s good enough for launching NASA science satellites, for launching complex commercial geostationary satellites and really every satellite imaginable, there’s no reasonable basis for it not being capable of launching something quite simple like a GPS satellite,” Musk argued.

“This really doesn’t seem right to us,” he continued “We’ve tried every avenue to figure out why is this the case, is there anything we can do besides file a protest, and it seems like we’re essentially left with the only option, which is to file a protest.”

“We are aware of Mr Musk’s press conference and are reviewing the transcript,” ULA spokesman Mark Bitterman wrote in an emailed statement. “The block buy contracting process was formally started in late 2011, with proposals delivered in 2012, and final contract signed in 2013. The DoD robust acquisition and oversight process and ULA’s improved performance enabled over $4B in savings as compared to prior acquisitions approaches.

“ULA recognizes the DoD plan to enable competition and is ready and willing to support missions with the same assurance that we provide today.”

The Air Force did not provide an immediate comment.

The suit is just the latest in a running feud between upstart SpaceX and ULA, a joint venture between aerospace giants Boeing and Lockheed Martin. ULA has had a virtual monopoly on military space launches for years, but Musk’s company hopes to break that hold — and has pledged to come in at a significantly lower price than ULA charges for launches.

“This contract is costing US taxpayers billions of dollars for no reason,” Musk said.

SpaceX expects to be certified for military launch in the Evolved Expendable Launch Vehicle program later this year, which would allow them to bid on military contracts like the ones given to ULA. Given how close the company is to certification, Musk wants to know why the Air Force would not just wait a few months so it could have competition for these 36 launches.

“The reasonable thing to do would be to cancel the 36 core contract, wait a few months for certification to complete, then conduct a full competition,” Musk said. “I think that would be in the best interest in the American public.”

The key to the EELV program is maintaining access to space, according to Marco Caceres, an analyst with the Virginia-based Teal Group. Because of that, the Air Force will always want to have multiple options on the table. But adding SpaceX into the mix, as opposed to the two options provided by ULA, could change that dynamic.

“The most important thing with EELV is having access to space when you need it, not the cost,” he said. “I don’t think the Air Force minds paying more money for launch vehicles [in order to keep an alternative option open], but I do sense that they mind paying three or four times as much.

“The whole point of EELV was to get the cost down from $400 million to maybe a third of that, and here we are 10 years later and the prices have inched back to where they are almost $400 million in launch, which is about three or four times the cost of launching with the Falcon 9,” Caceres said. “He has a point that this is a lot of taxpayer money going unnecessarily to a monopoly.”

Caceres said he was surprised by how strongly Musk went after the Air Force in his comments, but noted that it was likely a play to get Congress involved.

In that case, mission accomplished, as influential Sen. John McCain, R-Ariz., already issued a pair of letters — one demanding more information from Air Force Secretary Deborah Lee James, and one asking for an investigation by the office of Department of Defense Inspector General Jon Rymer.

Asked whether he was concerned the lawsuit could damage the relationship between the Air Force and SpaceX, Musk said he was optimistic the two sides could continue to work together.

“It’s not as though we’re battling the whole Air Force. That’s not the case at all,” Musk said. “I think we’re on very good terms with the vast majority of the Air Force. Our concern really relates to a handful of people in the procurement area of the Air Force.”

Musk also hit ULA for its use of Russian RD-180 engines on its Atlas V rocket, hinting that the use of RD-180 may violate sanctions against Russian individuals.

“As I’ve said, sunlight is the best disinfectant,” Musk said. “If everything’s fine, then I guess that’s great. But that seems unlikely to me.”

The lawsuit announcement came halfway through a news conference, which began with the statement that the company’s Falcon 9 reusable booster has successfully “soft landed” into the Atlantic Ocean. The goal of the program is to allow booster rockets to land back on Earth, driving cost savings by making the expensive hardware safe for more than one launch.

Musk said tests will continue over the ocean, and he hopes to run launch-and-landing tests at Cape Canaveral before the end of the year. ■